The Department of Housing and Urban Development’s failure to record indemnifications under a 2015 settlement agreement exposed the FHA insurance fund to potential losses of more than $47.4 million, according to an internal audit report. HUD’s Office of the Inspector General performed the audit to resolve issues related to two settlement agreements entered into by Fifth Third Bank and the Department of Justice. Fifth Third, a direct endorsement lender, had voluntarily disclosed to HUD 1,439 materially defective FHA loans that were originated between 2003 and 2013. HUD paid claims on 519 of those flawed loans, which generated more than $84.9 million in ineligible claims. In addition, FTB agreed to indemnify HUD for all losses for the remaining 920 FHA-insured mortgage loans. In January 2017, the bank voluntarily disclosed an additional 381 materially defective FHA loans. A HUD review of the ...
The federal statute that authorized the Department of Housing and Urban Development to establish the Home Equity Conversion Mortgage program addresses only HUD’s authority to insure reverse mortgages and not the lender’s contractual right to foreclose, the U.S. Court of Appeals for the Eleventh Circuit has ruled. Affirming the district court’s decision in The Estate of Caldwell Jones, Jr., Executrix Vanessa Jones and Leah Grace Jones, Minor v. Live Well Financial Inc., the circuit court determined that the HECM statute did not prevent foreclosure pursuant to a reverse-mortgage contract originated before Aug. 4, 2014, even if the non-borrowing spouse continued to live in the mortgaged property. The question before the court was whether the statute can be read broadly to prevent foreclosure after the borrower’s death and prevent the non-borrowing spouse from being ejected from the ...
Inadequate loan-servicing controls put the Department of Housing and Urban Development at risk of not being able to collect $6 million in partial claim notes, an inspector general audit revealed. The audit found that HUD’s National Servicing Center did not do a good job tracking partial claim notes for future collection. More specifically, NSC did not always enter partial claim notes and lender payments into its tracking system to ensure that note and mortgage documents supported the partial claim notes. The audit was triggered by an earlier IG pre-audit analysis, which found that partial claim notes may not have been properly uploaded in HUD’s Single-Family Mortgage Asset Recovery Technology (SMART) tracking system. HUD data showed there were 407,984 partial claims between Jan. 1, 2013, and Aug. 31, 2017. The department reviewed 695 non-sampled FHA loans with partial ...
FHA Issues Waiver of Property Inspections in Disaster-Stricken California Counties. FHA has issued a waiver of its timing policy for completing property inspections prior to closing or endorsing a loan for FHA insurance. The waiver is in effect in presidentially declared major disaster areas in Lake and Shasta Counties, CA, that were ravaged by wildfires and high winds. FHA believes that the wildfires and high winds have stabilized so as not to cause any further damage to properties, even though FEMA has not declared “all clear” in the affected areas. The waiver allows damage inspections to be completed after Oct. 2, for properties located in the PDMDA. NC Commissioner of Banks Amends State Reverse Mortgage Rules. The North Carolina Commissioner of Banks recently amended its ...
A few months back, the Federal Housing Finance Agency ordered Fannie Me and Freddie to end their involvement in SFR financial arrangements. However, any deals in progress were allowed to close...
RSS